How small businesses can cope
The recent recession is one of the worst economic situations the country has experienced, as government, corporate businesses and individual household are not spared by the effects.
As one of Nigerian popular axioms puts it, “unusual time demands unusual strategies/solutions”. Recession, thus, posed difficult operating environment for businesses, but small businesses have a great chance of escaping these woes plaguing others and creating business opportunities.
This piece offers one of the unusual business survival strategies to small and medium scale businesses in Nigeria.
1. Create or Identify a business niche
One of great disservices most businessmen usually do, but never acknowledged, is engaging all aspects of business or production process. This usually stretch the business resources and may reduce chances of survival during recession.
Therefore, the first thing is identifying one business area you have comparative advantage over others. Ensure this area is more pronounced in any of your business engagement, as there is possibility for third party contract.
2. Collaborate to Boost Revenue Channels
One of the ways of surviving recession and ensuring high sales turnover is to boost your business revenue channels by increasing collaborations with others, especially vertical businesses. An educational material store should collaborate with schools and teachers, water suppliers with local restaurants, banks with smalls businesses and many more.
It must be noted that the more the collaborations, the better the chances of reducing recession impacts.
3. Reduce your business overhead – downsize.
Business executives consider building revenue as an art while reducing cost as mechanic. This means working effective within business reasonable cost.
Merge related job positions and increase productivity of your employee. You may also consider outsourcing or employing a part-time worker to handle non-frequent business operations.
Don’t attempt to keep over bloated staff, it increases cost to business during economic downturn.
4. Reduce Business Inventory
Identify product or material that does not move or demanded for frequently. This is where your business cash is trapped and caused huge cash drain. Hence, avoid inventory of products like these during recession.
At worst, keep one to two units of such product.
5. Train and Cross-Train yourself staff
One of the invaluable tools of business is the level of knowledge deploy during the business operations. Hence, you need to acquire some social marketing skills to increase business engagements.
6. Expand Geographically - Go Digital Marketing
You need to consider exploring tapping business potentials offered by various social media platforms, as they are currently the most effective means of connecting your next customer or client.
7. Focus on Quality and Manage Effectively
Let this be your business principle. Ensure your products/service give value for money, as this is the only to secure repeated customer engagements.
The aggregation of these action plans would translate to your business doing it small/smaller but more profitable while growing and survival during the worst of economic situation are guaranteed.
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